No definitive decision on German aid for Opel… yet!

Article by Christian Andrei, on August 27, 2010

The future of thousands of workers at the Opel unit of General Motors Co. remains undetermined. A steering committee is set to meet on Tuesday to discuss if it will recommend that taxpayers' money be used to provide loans to Opel to fund about 8,300 job cuts.

However, Economy Minister Rainer Bruederle said no decision is expected with regards to the German aid that the GM unit has been asking for.

If granted, the state aid worth about 1.3 billion euros ($1.6 billion) will be used by Opel to become profitable once again after about 12 months.

In an interview at Brussels, Bruederle said that the committee isn't likely to arrive at "a definitive decision" during the meeting.

GM is willing to contribute only half of the 3.7 billion euros that Opel requires, saying that European taxpayers should handle this problem since after all, Opel is a European carmaker.

The senior members of the German government will consider the affected states in making its final decision. Up to 120,000 jobs in Germany alone are at stake here.

According to German business daily Handelsblatt, three of four German states with Opel plants are prepared to grant guarantees to GM.

Handelsblatt said that its government sources have pointed to the states of Rhineland-Palatinate, Thuringia and North Rhine-Westphalia to be willing to back these guarantees. Hesse had held back. This definitely raises the pressure on Chancellor Angela Merkel to grant GM's request. [via autonews - sub. required]

Topics: opel, germany

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